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South Sudan Accuses Khartoum of 'Economic War'

July 24, 2011 8:00 PM

A woman displays Sudan's new currency at the central bank in Khartoum, Sudan. The Sudanese government began circulating a new edition of the Sudanese pound on Sunday as a precautionary measure following the loss of oil revenues resulting from South Sudan'

South Sudan has accused Sudan of launching an "economic war" by issuing a new currency less than three weeks after the two countries split.

Khartoum began circulating the new Sudanese pound on Sunday, less than a week after newly independent South Sudan introduced its own currency.

Speaking Monday in South Sudan's capital of Juba, the country's top negotiator Pagan Amum said the north violated an agreement by issuing its new currency so soon.

Amum said many South Sudanese still hold the old Sudanese pounds, and officials in Juba worry Khartoum will refuse to buy back the old currency.

Sudan's central bank said Sunday it had not reached an agreement with South Sudan about what to do with the old money.

The old Sudanese pound has plunged in value this year amid concerns it would be replaced and that South Sudan's independence would hurt Sudan's state finances.

South Sudan now controls most of the oil wells that used to produce large streams of revenue for the Khartoum government.

Khartoum is expected to continue reaping some benefit from those wells through transit fees. South Sudan is landlocked, and the only way it can export its oil is through pipelines that run through Sudan.

The two Sudans are still at odds over several major issues, including borders and the future of the oil-rich Abyei region.

The disagreements have sparked fears of a new Sudanese conflict. The former northern and southern Sudan fought a 21-year civil war that ended in 2005.